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Christopher Sheffield

(Page 3 of 3)

When health care systems purchase practices, Archer says, they are typically purchasing the real property and equipment of the practice at fair market values and employing physicians at well documented salaries for that specialty.

For example, when Methodist acquired Sutherland, the system purchased its 50,534-square-foot office on Wolf River Boulevard for $13.3 million. The Shelby County Assessor of Property put the total appraisal of the 4.3 acres and building at $9.4 million in 2010.

While physicians get a cash infusion and help running the operation, the hospital system gets access — albeit not exclusive — to the practices’ patients and income from ancillary services, which, in some cases, are reimbursed to hospitals at higher rates than to practices, Archer says.

Steve Gubin, president of what is now Stern Cardiovascular Foundation, says Stern Cardiovascular considered an employment model for at least a year before making the change.

“There is a lot of change in health care which we as physicians don’t have control over,” Gubin says.

Aligning with Baptist will help keep operating costs down through economies of scale, Gubin says, and provides a resource for capital. Already Baptist has invested to help start a new outpatient cath lab that went into operation Jan. 10, and more improvements are in the pipeline.

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